Seeds of Opportunity: The African Growth Series
November 2022 | Issue 2
In this week's issue, you will learn more about:
- COP27: Africa’s Investable Infrastructure Opportunities
- COP27's Significance for Africa
- Think Tank: Pockets of Excellence in Africa's Logistics Journey
- Technology Advancements Shaping the Future of Logistics in Africa
- Africa's Tech Startup Scene
- South Africa's Space Weather Monitoring Infrastructure
- Unlocking Opportunities in African Logistics
COP27: Africa’s Investable Infrastructure Opportunities
Frost & Sullivan Africa is very excited to announce the launch of its report on ‘Africa’s Investable Infrastructure Opportunities’ as part of its partnership with Africa investor and the African Green Infrastructure Investment Bank (AfGIIB) at this year's COP27 at #sharmelsheikh, Egypt from 6 November 2022 to 18 November 2022.
Click HERE to learn more about the report which will be launched tomorrow Friday, 11 November 2022.
COP27's Significance for Africa
Africa is home to over 1.3 billion people, half of whom will be under 25 years old by 2050. The continent contributes a mere 4% (US$ 2.6 Trillion) to the global GDP, mainly constrained by poor infrastructure. The covid-19 pandemic effectively reset the clock on several infrastructure development projects and financing activities across all industries. Just as the content seemed to be recovering from the impacts of the pandemic, the Russia-Ukraine conflict risks sliding Africa’s growing economic prospects back into stagnation. Africa’s real GDP is forecast to grow by only 4.1 per cent in 2022, considerably lower than the nearly 7 per cent in 2021, caused by slow growth and higher than anticipated inflation rates. The positive news is that African governments have made significant strides toward achieving the UN’s Sustainable Development Goals (SDGs) and the corresponding AUs Agenda 2063 goals in their national strategies and development plans. However, in 2019, prior to the Covid-19 pandemic, Africa’s overall SDG progress score was 52.9%, with North and Southern Africa performing better than West, Central and East Africa. The Covid-19 pandemic caused a severe socioeconomic and humanitarian crisis in Africa, further amplified by the Russia-Ukraine crisis just as Africa began to recover. Most African states, especially those in sub-Saharan Africa (SSA), are far from being on track to take to meet the intended goals and targets as defined by either the 2030 SDG Agenda or Agenda 2063. Africa’s failure to attain the SDGs will have implications everywhere on the planet since some SDGs possess a transboundary nature, for example, climate change, life below water, and effective partnerships.
Think Tank: Pockets of Excellence in Africa's Logistics Journey
Join Craig Parker, Research Director at Frost & Sullivan Africa as he leads the discussion ''Pockets of Excellence in Africa's Logistics Journey'' at 15h00 SAST on Thursday 17 November alongside Lars Veul (Co-founder, Pargo), Friedel Spies (Business Development Director, Imperial) and Hendrik Malan (Africa CEO, Frost & Sullivan Africa).
Date: Thursday, 17 November 2022
Time: 15h00 SAST
Registration Link: https://www.brighttalk.com/webcast/5562/565051
About this talk:
Recent advancements in supply chain management, business models, and technology have allowed many businesses to expand operations despite challenging times during the COVID pandemic. They also allowed service expansion to customers in Africa in an environment that can require unique solutions. In this Think Tank, we will discuss the challenges and focus on the pockets of excellence that have emerged, with an eye on future opportunities.
Key Takeaways
• Identify the key opportunities in logistics advancements in Africa.
• Gain intelligence on the drivers and catalysts for logistics growth and the ability of companies to overcome challenges through unique business models.
• Learn about technological solutions in Africa.
Technology Advancements Shaping the Future of Logistics in Africa
In 2020 the global logistics market was estimated at USD 8,6 trillion. Africa accounted for USD 344.56 billion, representing 4% of the global market. Similar to other markets, the pandemic and the conflict in eastern Europe affected the African logistics market. However, technological advancements have facilitated significant growth in Africa’s logistics market by improving distribution models and reducing errors and inefficiencies. Furthermore, the growing middle class and the shift in consumer preferences has resulted in an increased need for quality service and faster delivery times, facilitating growth in the logistics and last-mile delivery industries throughout the continent.
Additional technological advancements such as digitisation and blockchain are key growth drivers for the African logistics industry. Digitalisation provides a wealth of benefits, such as improved efficiency and improved service delivery received by cargo owners and truck owners. While blockchain delivers smooth and integrated communication, enabling transparency and greater data collaboration between financial and logistic services. However, the AfCFTA and integration of African borders will bolster the region’s logistics industry by increasing cross-border trade, catalysing investments and making the movement of goods across African countries more seamless.
On the 17th of November, Frost & Sullivan will be hosting a Think Tank on the advancements in Africa’s logistics industry and how these can be a catalyst for growth throughout the continent.
To join the event, register here: https://www.brighttalk.com/webcast/5562/565051
Africa's Tech Startup Scene
Africa has one of the highest average entrepreneurial rates worldwide, with 22% of the working-age population starting businesses in 2021. Unemployment, opportunities in the market and rising digitalisation increasingly motivate African entrepreneurs to innovate. Leading to an increase in startups and innovative digital services, which has attracted the interest of both international and local investors. The total funding value for startups increased tenfold from less than US$190 million in 2015 to over US$1,9 billion in 2021. The FinTech sector received 62% of the total funds, Health & Biotech received 8% and Education received 7% in 2021.
Opay, Healthstack and OURS Space are examples of upcoming startups within those three sectors. Opay is a mobile-based platform for payments, transfers, loans, savings, and other essential financial services. Healthstack provides Digital Healthcare Platform as a Service (DHPaaS) with simple, low-cost, and intelligent digital tools to facilitate interactions between healthcare providers and their clients. OURS Space provides a Plug & Play learning hub through a remote learning device that can help improve access to learning by overcoming digital infrastructure barriers to education.
South Africa's Space Weather Monitoring Infrastructure
Over the past three years, more than ZAR100 million has been invested in the South African National Space Agency (SANSA) by the Department of Science and Innovation (DSI) in order to realise South Africa’s new space weather centre. Located in Hermanus, Western Cape, the new centre has been established as a 24/7 space weather monitoring system that will serve as a crucial ‘watchdog’ against the early warnings that are imperative for the protection of satellites, national power grids, communications and navigation systems from the effects of space weather phenomena. In fact, the state of the new weather centre is so advanced that it will serve as the regional warning centre for space weather in Africa – as reinforced by SANSA’s membership to the International Space Environment Service. This is of vital importance, especially in consideration of Africa’s growing internet and communications reliance. While the Middle East and Africa have a low global navigation satellite system device per capita unit rating (only 0.20 in 2019 as compared to the worldwide average of 0.80), this is estimated to double by 2029. Moreover, the internet penetration rates in Southern Africa are currently at 68% - 5% above the global average, with Western Africa at 43%, Eastern Africa at 26% and Middle Africa at 25%. While the centre is primarily a means through which space weather will be monitored, it will also function to aid South Africa’s goal to contribute towards transnational planetary scale cooperation. Aside from the protection of satellite and communication networks, the centre will also provide support to the agricultural economy through the use of open and big data for vegetation conditions and stress monitoring. Overall, the centre will position South Africa as a satellite powerhouse – capable of generating a revenue stream of ZAR18 billion in the next two years, a massive increase from the current revenue of approximately ZAR350 million.
Unlocking Opportunities in African Logistics
Africa, the home to 1.3 billion people is projected to continue to grow, reaching 2 billion people by 2050. The growth is expected to be highly concentrated in urban areas but needs to be met with efficiency in supporting industries as the region as battles with infrastructure investment shortfalls (~$67-$107 billion according to the IFC). A key supportive sector to consider is transportation. The continent is highly dependent on roads and rail transportation for the movement of goods and people, yet the segment faces key challenges with congestion, lack of adequate infrastructure, safety, efficiency and turnarounds etc., These challenges affect both economic trade and overall growth of the economy, pointing to the urgency in resolving. In the last decade, the African logistics sector is seeing positive strides through start-ups aimed at addressing some of these key issues. Growing start-up trends include those addressing the rural-urban divide, through last-mile delivery, industry digitisation and B2B logistics solutions. Highlight companies include the likes of Trella, Twiga Foods, Kobo360, BasiGo, Pargo, Max.ng etc., spread across markets in South Africa, Nigeria, Kenya and Egypt. In 2021, alone Africa saw at least 21 transport start-ups coming online. With the regulatory environment also improving, through AfCFTA, the outlook seems positive.
To unpack how some of these trends will come into play, in which markets and timelines of key growth opportunities, Frost & Sullivan will be hosting a Think Tank on the advancements in Africa’s logistics industry on the 17th of November.
To join the event, register here: https://www.brighttalk.com/webcast/5562/565051
To find out more about opportunities in Africa, please contact Lynne Martin.
